Environmental (Commonwealth Union)_ In a decisive step toward curbing greenwashing and strengthening consumer rights, the UK’s Competition and Markets Authority (CMA) has been granted significantly enhanced enforcement powers under the newly enacted Digital Markets, Competition and Consumers (DMCC) Act. As of today, the CMA can impose direct and substantial financial penalties up to 10% of a company’s global annual turnover on businesses found guilty of misleading environmental claims.
This shift marks a pivotal moment for both consumers and companies operating in the UK, transforming the regulatory landscape around sustainability, transparency, and marketing. For consumers, it delivers greater confidence that environmental claims made by companies are accurate, substantiated, and not just marketing spin. For businesses, it signals the end of vague or misleading “eco-friendly” messaging without rigorous evidence to back it up.
Raising the Bar for Sustainability Claims
Sarah Mukherjee MBE, CEO of the Institute of Environmental Management and Assessment (IEMA), emphasized the importance of this legislative change:
“This decision highlights the importance for organisations to have in-house sustainability professionals who can provide an evidence base against which marketing and product claims can be made. Consumers should be able to have confidence that organisations are doing what they say when it comes to environmental and sustainability.”
By formally empowering the CMA to take enforcement action without the need for lengthy court processes, the DMCC Act addresses a critical gap in regulatory oversight. Until now, the responsibility for policing green claims has primarily rested with the Advertising Standards Authority (ASA) a body with limited authority to impose penalties.
With the CMA now holding a more influential role, the UK is setting a new standard in holding businesses accountable for the environmental claims they make.
Turning Risk into Opportunity
Rather than being considered a deterrent, experts suggest the new powers should be viewed as an opportunity for businesses to demonstrate authentic sustainability. Simon Colvin, IEMA Fellow and Environmental Law Specialist at Weightmans, noted:
“These new enforcement powers should help to level the playing field where green claims are concerned. A YouGov survey revealed that over half of UK consumers consider a brand’s environmental credentials when making a purchase. Businesses should use this as a prompt to invest in strong sustainability governance.”
According to Colvin, companies that genuinely embed sustainability into their operations and ensure their marketing is transparent and evidence-based stand to benefit from enhanced brand trust and loyalty.
He also cautioned that the CMA should move quickly, especially when it comes to sectors like fashion, supermarkets, and utilities that are currently under investigation. These industries are under increased scrutiny due to a history of exaggerated or misleading green claims.
“Providing sustainability training to marketing teams and involving sustainability experts in communications will help avoid the kind of missteps that could now cost companies millions,” Colvin added.
A New Era for Accountability
Crucially, the CMA’s new powers are non-court-based, enabling a more agile and proactive regulatory approach. This means companies can no longer expect long grace periods or drawn-out litigation before facing penalties. The spotlight is now on substantiating every green claim with credible data and transparent methodologies.
Many larger companies may already have such data due to mandatory ESG reporting requirements, but the new law places additional emphasis on integrating sustainability experts into marketing and legal teams. It’s no longer sufficient to outsource responsibility or rely on vague third-party certifications.
In the coming months, the CMA is expected to “flex its muscles”, targeting major offenders and setting examples that underscore its intent to restore fairness and integrity in environmental marketing.
The DMCC Act offers businesses dedicated to genuine sustainability the opportunity to establish credibility, set a positive example, and contribute to a cleaner, greener future. For those that continue to make hollow claims, the cost will now be more than just reputational; it could mean losing a significant share of global revenue.
